Audit committees are no longer confined to compliance and conformity; they have become at the forefront of major questions regarding risks, technology, and decision sustainability.This article is a professional translation of an analytical presentation issued by BDO experts, presented in 'The Third Bank' as a reference material to understand the priorities of governance and oversight looking towards 2026, while preserving the literary rights of the author and the original entity.

For audit committees, regulatory disruptions, economic shocks, and the rapid pace of technological breakthroughs intersect today to test the limits of boards' ability to oversee. The current environment means that yesterday's tools and methods are no longer sufficient to face these headwinds. These transformations pose real challenges, but at the same time, they open up opportunities, necessitating audit committees to recalibrate their oversight roles, ask more precise and deeper questions of management, auditors, and other stakeholders, and clarify their position and responsibilities within the board.

This edition presents core priorities and practical strategies that audit committees need in 2026, not only to survive but also to lead by enhancing governance, improving financial reporting quality, and building the institutional resilience necessary to thrive in a landscape where uncertainty is the norm rather than the exception.

Continue reading to discover what is at stake, what is changing, and how audit committees can lead their organizations to success in the coming year.

Audit Committee Priorities for 2026

Enhancing resilience in a dynamic geopolitical environment

Maintaining focus amid growing complexity in reports and financial disclosures

Enhancing oversight of institutional risk management

Building a deep institutional understanding of technology

Reassessing oversight on risks related to transactions and fraud

Enhancing resilience in a dynamic geopolitical environmentToday, we are moving within a complex global environment shaped by changing regulatory frameworks, fluctuating tariff systems, and dynamic geopolitical tensions.

In environments characterized by overlapping regulatory and economic dimensions, it is no longer sufficient for audit committees to merely monitor regulations from a compliance perspective; they must understand the indirect impact of public policies and global changes on decision sustainability, supply chains, funding flows, and stakeholder trust.

Here, resilience transforms from a managerial concept into a conscious oversight practice.

Adapting to regulatory transformations: Ensuring compliance and strategic flexibility

Let’s observe the following American model: Current priorities of the U.S. Securities and Exchange Commission reflect a deliberate trend towards supporting capital formation, accompanied by efforts to ease compliance burdens, including streamlining the identification of the reporting entity, updating exempt offering paths, and expanding facilities for startup growth companies.

In contrast, the future of leadership at the Public Company Accounting Oversight Board(PCAOB) remains unclear, amidst previous legislative attempts to merge its functions within the SEC facing opposition. The SEC has called for nominations to form a new PCAOB (including all five seats, such as the chair position), alongside reviewing the board's proposed budget. In the meantime, the PCAOB board has postponed the commencement date of the quality control standard for auditing (QC 1000) to December 15, 2026, to allow sufficient time for auditing firms to prepare.

Facilitating access to capital: Supporting institutional growth and innovationAs reflection on the American model continues: The SEC and its closest counterpart in our community, The Capital Market Authority (CMA), seek to implement reforms aimed at reducing compliance burdens, in parallel with major supporters exploring ways to expand access to capital markets for private companies and small public firms. Key initiatives in the mentioned regulatory agenda include studying the expansion of individual investor participation in private markets.

This trend reflects a desire to stimulate innovation and economic growth while forming capital across both public and private sectors. Audit committees must monitor the impact of these trends on reporting and disclosure requirements, considering strategies to attract investors, a topic likely to be raised at the board level as a whole.

Dealing with tariff changes: Mitigating financial and operational risksThis direction coincides with rising global volatility; customs actions, whether preemptive or retaliatory, have impacted the U.S. and its trading partners, necessitating reinforced planning and compliance efforts, reshaping supply chains. Audit committees are advised to discuss with management how to reassess sourcing strategies, manage new cash flow pressures, cope with changing tariff rates, and evaluate the accounting impact of tariff obligations, considering global tax reforms.

Responding to economic pressures: Aligning interest rate policy with employment and growth goalsBy early November 2025, the Federal Reserve implemented consecutive rate cuts, targeting ranges of 3.75% – 4%, the lowest level since late 2022.

These steps reflect growing concerns about economic momentum and weak labor market conditions, with policymakers signaling uncertainty regarding further cuts in December. While waves of potential layoffs loom, the pace of employment remains limited, reflecting a cautious outlook on workforce stability. Audit committees should integrate this data into their oversight of financial planning, liquidity and investments, capital and technology (including the human aspect of innovation), and assessing risks associated with interest rate sensitivity and labor costs.

Maintaining focus amid the complexity of reports and financial disclosures

Amidst growing societal expectations regarding transparency, the quality of disclosures is no longer measured solely by the completeness of data, but by its ability to tell a performance story, link numbers to impact, and explain decisions in their institutional context. This shift places audit committees before a dual responsibility: safeguarding accuracy and protecting meaning.

Managing uncertainty in forecasting: Enhancing the accuracy of estimates and judgments

Financial reports have become more complex with the rise of economic uncertainty surrounding forecasts and valuations, necessitating audit committees to maintain a high degree of professional conservatism, especially concerning estimates and scenario planning.

BDO's 2025 Board Survey indicated that only 47% of board members rated management's forecasting effectiveness as “very high,” while 13% deemed it ineffective, highlighting a significant gap for improvement. Although financial unpredictability is ranked among the top risks warranting board attention, only 50% rated the board's effectiveness in challenging management’s judgments and estimates.

The PCAOB’s focus on accounting estimates points to common deficiencies alongside good practices that audit committees can use to guide oversight of management and external auditors. These recommendations include not only challenging the assumptions used but also the estimation approaches or possible alternatives, and the sensitivity analysis related to judgments and estimates.

For more details, including additional questions audit committees should direct to management, as well as questions that stakeholders may pose on this topic, refer to BDO’s report on accounting and reporting in times of economic uncertainty.

Cryptocurrencies

Let’s observe the American model once more: The current leadership of the SEC has prioritized the regulation of cryptocurrencies, evident through several initiatives, most notably:

1. Developing a comprehensive regulatory framework for cryptocurrency accounting, including disclosure requirements

2. Forming a specialized working group on cryptocurrencies

3. Issuing staff accounting bulletin No. 122, which rescinded previous guidance on accounting for custodial arrangements of cryptocurrencies

4. Publishing guidance outlining how some federal securities laws apply to offerings and registrations of securities associated with cryptocurrencies

For more information, refer to BDO’s SEC reporting insights report for 2025.

At the same time, the U.S. Congress is working on parallel regulatory legislation, including:

1. The National Stablecoin Innovation and Formation Guidance Act (GENIUS Act), signed in July 2025, which establishes a federal regulatory framework for stablecoins

2. The Digital Asset Market Clarity Act (CLARITY Act), which was under consideration in the Senate at the time of writing this report and proposes a comprehensive regulatory framework outlining the roles of regulators, registration requirements, and more

Enhancing disclosure transparency and building stakeholder trust

While the SEC prioritizes simplifying disclosure practices, companies continue to strike a delicate balance between transparency on one hand and changing legal, competitive risks on the other. Participants in the SEC's recent discussion sessions on compensation disclosures seem to favor simplified or more meaningful disclosures.

Recent interpretations of compliance and disclosure have clarified the scope of activities undertaken by shareholders that could influence